The town of Tröglitz, which lies roughly 40 kilometers (25 miles) southwest of Leipzig, has drawn national media attention in Germany in recent weeks as a far-right wing group's campaign to keep out asylum seekers divides its local population.
In early March, the town's mayor, Markus Nierth, resigned after neo-Nazis opposed to the local government's decision to take in 40 refugees planned a protest directly outside of his home.
Outside scrutiny intensified further on Saturday when Saxony-Anhalt state investigators confirmed that a fire at the asylum seekers' housing - which is to open in mid-May - was set on purpose.
Nierth expressed his shock to DW on Saturday, claiming that the attack was an indication of a resurgence in neo-Nazism.
German Justice Minister Heiko Maas called the act "shameful," in an interview with the Sunday edition of Die Welt.
"We must stand up against right wing extremists together where ever they campaign against foreigners . And we must make clear that people, who have just lost everything and fled to us in search of help, are welcome [in Germany]," Maas said.
According to the Saxony-Anhalt state prosecutor's office, at least one person entered the housing unit early Saturday morning and set the fire around 2 a.m. local time (0100 UTC). No motive has been named, but state authorities said they have not yet ruled out that the arson attack was politically motivated.
A candle light demonstration was held in the center of town early on Saturday evening.
Tröglitz 'probably won't ever recover'
In an interview with the German daily Berliner Taggesspiegel, the ex-mayor expressed his outrage over the incident, saying he assumed someone had started the fire intentionally and that whoever had planned it knew people were inside.
"I'm stunned, sad and angry all at the same time," Nierth said.
The town "probably won't ever recover" from the incident, he added. It will have "incalculable consequences."
On Tuesday, an estimated 500 Tröglitz residents gathered for a town hall meeting to discuss concerns about the expected group of refugees, scheduled to arrive in mid-May.
Unrest in Syria, Iraq and North Africa has fuelled the upsurge in the number of asylum seekers. The United Nations reported last week that 2014 saw the greatest number of asylum applications since the Bosnian War in 1992. Over the last two years, Germany has seen a greater spike in asylum requests than any other EU country. Since 2014, it has received 173,000 asylum applications, more than any other industrialized country.
Because the refugees are to be housed across the whole of Germany, many communities have also expressed a number of concerns including sufficient housing and the feasibility of integrating different cultural groups.
According to the German government, the number of hate crimes against refugees rose in 2014.
kms/lw (AFP, dpa)